Article

Going mobile

Taking ATMs on the road offers the possibility of big bucks -- but even bigger headaches. That's why, just like the Boy Scouts, mobile deployers say it's important to 'be prepared.'by Ann All, editor

February 27, 2002

In an age of falling ATM volumes, it's still possible for an off-site deployer to get thousands, even tens of thousands, of transactions.

But there's a catch: He'll have to go way, way off-site.

It won't be easy -- or cheap. Bad weather, unreliable telecommunications out-of-control crowds and the dreaded machine downtime are just a few of the variables that can shave transactions at events like festivals and concerts.

Unlike more traditional permanent deployments, there's usually no way to recoup the costs.

"If you're doing a four-day event and it's really, really hot or really, really cold or really, really rainy, it's going to cost you money to be there," said Gary Marquardt of Automated Access Systems LLC, a New Berlin, Wis. based deployer. "There is no make-up time. When that event is gone, it's gone."

"The fixed expense is the same whether you've done one transaction or 20,000 transactions," agreed Doug Falcone of Access to Money.

Falcone and his Chatham, N.J.-based ISO earned a measure of notoriety after deploying 12 machines at last July's Woodstock '99 music festival. He ended up losing equipment and over $10,000 in cash after crowds rioted near the end of the three-day event and stormed the machines.

The riots proved that even the best-laid plans can go awry.

"We had meeting after meeting after meeting to make sure that we had everything we needed when we went off-site," Falcone said. "But even when you go through and try to cover every possible scenario, things will come up that you just can't foresee."

Like Falcone, Marquardt stresses the need for "micro-management." He advised, "Make sure everything is checked, re-checked and checked again."

Despite the well-publicized chaos at Woodstock, both Falcone and Michael Deutsch of Barrington, Ill.-based Flash Cash ATM Services Inc., his partner at that event, are moving forward with more mobile deployments.

"We felt it could be done right and be done securely by making changes and by learning from what we had done wrong at Woodstock," Falcone said.

Deutsch trucked 10 machines to the Florida Everglades for a four-day, year-end festival featuring the band Phish. Drawing on his Woodstock experience, Deutsch provided more machines per capita to keep the crowd's impatience at bay. He also beefed up security, bolting the ATMs to concrete pads.

What's my line?

At the Phish fest, telecommunications posed a greater challenge than crowd control for Deutsch. He ran four machines on land lines and six on wireless analog. With no payphones on site and an audience packed with cell phone users, however, the wireless machines sometimes struggled to make a connection.

Another downside: roaming charges. "Every time you'd lose the line during a transaction and it started to redial, you'd get whacked again," Deutsch said.

According to Deutsch, he's developed a fix for these problems and hopes to make it available to other mobile deployers soon.

At Woodstock, plans to use CDPD (Cellular Digital Packet Data) fell through because the necessary coverage wasn't available in upstate New York, site of the festival.

CDPD coverage is "not as extensive as you would think," Falcone said. "The major metro areas are OK, but when you go outside of those areas, it gets dicey."

Marquardt, whose talents include installing business phone systems, advises mobile deployers to come prepared with plans B, C and D in the event of a communications failure. "Don't even think about it unless you have at least three back-up phone lines," he said.

Like Falcone, Marquardt said CDPD coverage can be "sporadic." He cautioned, "If a CDPD switch goes down and all of your machines are running on CDPD, you can lose a whole event."

Marquardt is keeping his eye on some new technologies, though he'd rather not say which ones. "Nineteen years of telecommunications experience have helped me find this stuff, so I don't want to give it out to just anyone," he explained.

The gouge game

Many major events are held in remote areas, occur on a weekend and are clogged with crowds -- not exactly a vendor's ideal scenario. Because of that, mobile deployers may pay a premium for cash replenishment and other services.

Noting that "events are always in the middle of nowhere," Falcone said, "It's a one-time crack for every vendor. They can literally hold you up."

While the armored car service at Woodstock was pricey, Deutsch had better luck at the Phish Fest. "At Woodstock, the carrier was the only game in town," he said. "Phish was maybe 10 percent of what we paid in New York because there are four or five carriers in central Florida."

Marquardt, whose company sends ATMs to hundreds of events a year, said it's possible to command better deals by giving vendors repeat business. "You have to become very innovative."

To help cover his expenses, Deutsch collected $3.75 and $4 convenience fees on his machines at the Phish Fest.

However, Marquardt, who contends that ATM users take offense at higher fees, rarely charges more than $2.50. Instead, he bases his business on volume.

"It's like McDonald's. You don't go in and pay four bucks for a burger; you pay 99 cents. McDonald's still makes money because they sell billions of burgers," Marquardt said.

Safety and numbers

After Woodstock, Falcone didn't want to take any chances with security. He invested in custom-made trailers that are configured to hold two, four, six or eight ATMs.

With the trailers, it's easier to keep his machines out of harm's way, he said. "At the end of the evening, we hook the trailers up to our trucks and go."

Marquardt prefers to keep his ATMs on site, though he never deploys without a 24-hour security crew. He sometimes requires event organizers to pour slabs of concrete so that machines can be bolted in place.

It's important to negotiate those kinds of details in advance, but Marquardt said that's a special challenge at county fairs and similar events where staffers are typically volunteers. "You have to chase them down at home, at the office, all kinds of places."

Deutsch said that multiple-day events, particularly ones where attendees remain on site, offer the best potential for profit. "When you've got a group of people staying in the same place for several days -- those people need you."

Concurring with Deutsch, Falcone defined his dream event as "five million people in a field for five days."

Extra, extra

Because of the logistical challenges of the mobile business, deployers must bring along more of everything -- including hardware, manpower and ingenuity. For instance, Marquardt always keeps spare machines on site.

"I don't mess around trying to fix a machine there," he said. "If a machine goes down, within 30 minutes I'll have another one up and running."

Although he's based in Wisconsin, Marquardt keeps trucks, trailers, machines and staff in states where he does lots of business. Similarly, Falcone has established an office in Tucson, Ariz.

Crowd psychology

Falcone said it pays to learn as much as possible about an event before loading a truck with machines and hitting the road. A friend who was a newcomer to mobile deployment planned to take eight machines to a NASCAR event in Florida. Falcone advised him to reconsider based on his own experiences at the racetrack.

"Those people arrive around 8 or 9 a.m. and spend a few hours walking around the souvenir and concession areas. The minute 12 o'clock comes, they're up in the stands for the next four-and-a-half hours," he explained.

The outcome: Even after halving the original number of machines and amount of cash, Falcone's friend lost $3,000.

Covering bases

Even savvy mobile deployers can get burned. An event promoter Marquardt works with regularly contacted him in November, asking him to bring three machines to an April concert in downtown Miami. The promoter predicted a crowd of 150,000 to 200,000.

The promoter revised his numbers in January, saying the turnout would likely be 100,000 to 150,000. In February, he lowered expectations even more, putting the number at 75,000. Because of his previous relationship with the promoter, Marquardt decided to go ahead and do the event.

When he arrived in Miami three days before the concert, he learned organizers were expecting an attendance of only 25,000 to 50,000.

"At that point, I knew we'd write it off as a vacation," he said.

Because of experiences like that, mobile deployment is not a way to "get rich quick," Marquardt emphasized. He can afford to take an occasional hit because ATMs are not his only business. He provides payphones, ticket kiosks and other equipment to fairs and festivals.

"People look at this, and they only see the number of transactions. They don't look at the amount of work and effort you have to do to get those transactions," Marquardt said. "You can lose your butt doing this."